HSBC’s new mortgage is pegged at 2.99%, but homeowners are advised that trackers could be even cheaper than that

BORROWERS are being offered the lowest rate in history on a five-year fixed
mortgage but experts warn other deals could work out thousands of pounds
cheaper.

HSBC, one of Britain’s biggest lenders, shook up the market last week by
introducing a five-year fix at 2.99%, with a £1,499 fee. It is significantly
cheaper than similar fixes on the market — the average rate on a five-year
deal is 4.83%, according to Moneyfacts, the data firm — but requires a 40%
deposit or equity.

However, it comes as the markets expect the first rise in Bank rate to be at
the end of 2015, suggesting that cheaper tracker deals could be a better
option.

HSBC’s offer follows a raft of rate cuts from other providers, with Nationwide
building society and Halifax reducing the cost of fixed deals by 0.1 and 0.2
percentage points respectively. Nationwide has a five-year fix at 3.79%
available to